US Appeals Court Upholds Law Requiring TikTok’s Sale or Ban by January

A US federal appeals court has upheld a law mandating ByteDance, the Chinese parent company of TikTok, to sell its US assets by January 19, 2025, or face a ban. The ruling marks a significant victory for the US Justice Department and national security advocates but deals a major blow to TikTok, which is used by 170 million Americans.

National Security Concerns

The law was upheld as part of a bipartisan effort to address perceived national security threats posed by China’s access to TikTok’s vast data on US users. The Justice Department has argued that ByteDance’s Chinese ownership allows the Chinese government to manipulate information Americans consume via the app.

“Blocking the Chinese government from weaponizing TikTok is an important step,” said US Attorney General Merrick Garland.

However, the Chinese Embassy in Washington condemned the ruling as “a blatant act of commercial robbery” and warned it could harm US-China relations.

TikTok to Appeal

TikTok plans to appeal the decision to the Supreme Court. CEO Shou Zi Chew said, “While today’s news is disappointing, we will continue the fight to protect free speech on our platform.”

The ruling has sparked criticism from free speech advocates, including the American Civil Liberties Union, which called the ban a violation of the First Amendment rights of millions of Americans.

Key Impacts and Next Steps

• Deadline: ByteDance has until January 19, 2025, to divest its US operations. If not, app stores like Apple and Google will be prohibited from offering TikTok, and internet hosting services will be barred from supporting it.
• Possible Extension: President Joe Biden has the authority to grant a 90-day extension if ByteDance can demonstrate significant progress toward divestiture. However, the outcome remains uncertain as President-elect Donald Trump, who takes office on January 20, 2025, has expressed opposition to any ban extension.
• Broader Implications: The decision sets a precedent for banning other foreign-owned apps over data security concerns, potentially affecting platforms like Tencent’s WeChat.

Economic Ripple Effect

Shares of TikTok competitors surged following the decision. Meta Platforms, which owns Instagram and Facebook, hit an intraday record high and closed up 2.4%, while Google parent Alphabet, which owns YouTube, closed up 1.25%.

National Security vs. Free Speech

The court acknowledged the potential impact on free speech but argued the national security risks posed by TikTok’s ties to China outweigh those concerns. Judge Sri Srinivasan noted, “170 million Americans use TikTok to engage in free expression… but Congress and multiple Presidents determined that divesting it from Chinese control is essential to protect national security.”

ByteDance, valued at $268 billion as of December 2023, faces a monumental challenge in meeting the law’s requirements and navigating Chinese government restrictions on technology transfers.

Unless overturned by the Supreme Court, the ruling could lead to TikTok’s ban in the US, reshaping the social media landscape and heightening tensions between the world’s two largest economies.